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Monetary integration is achievable – COMESA Central Bank chiefs

Photo credit: Reuters

11 Apr 2018

Governors of Central Banks and representatives from eleven COMESA countries have reiterated that achieving monetary integration is possible and it will be enabled if Member countries have larger and deeper financial markets. Other factors such as having more competitive banking sectors, stronger institutional and regulatory environment and more transparent central banks also need to be in place.

The Bank chiefs have also agreed that for deeper regional integration to take effect, Central Banks have a huge role to play in bringing about the required transformation in the respective COMESA economies.

This was said during the 23rd meeting of the COMESA Committee of Governors of Central Banks held on 29th March 2018 in Djibouti. The meeting was preceded by a symposium on the ‘Roles of Central Banks in promoting Sustainable Growth.’

Speaking during the event, Governor of the Central Bank of Djibouti Mr Ahmed Osman urged central banks in the region to put deliberate effort towards greater development of efficient, stable and healthy financial markets further calling for greater monetary integration.

While appreciating the success that has been achieved so far under the COMESA Integration Agenda in general and monetary integration programme in particular, Mr Osman added, “We as Central Banks have a critical role to play in the implementation of the COMESA Monetary Integration programme to make the region a zone of macroeconomic and financial stability.”

Both the meeting and the symposium underscored that success of the COMESA Free Trade Area, Customs Union, Common Investment Area, the drive towards industrialization and the plan to establish the Common Market and economic community which he said require greater monetary integration.

Speaking when he officially opened the meeting, Djibouti’s Minister of Trade and Industry Honourable Hassan Houmed Kamil emphasized the importance of sustaining a conducive environment for stability, investment and growth. He called on Member States to ensure predictability, transparency and accountability to achieve sustainable economic growth. He also called for speedy implementation of the Regional Payment and Settlement System (REPSS) in order to achieve significant increases in intra-COMESA trade.

Secretary General Sindiso Ngwenya, who was at the meeting, stated that the focus of COMESA is to contribute to structural transformation of the economies of the Member States so as to foster the overall economic development through trade facilitation and investment promotion.

This will help create an enabling environment for trade facilitation, market integration, infrastructure development, industrialization, small and medium enterprise development, regional industrial clusters, modernising institutional and regulatory policies, capacity development as well as resource mobilization.

He added that the COMESA Monetary Institute and the COMESA Clearing House are important instruments for developing policy and institutional frameworks to enhance monetary integration in the region.

Central Bank Governors and experts from Burundi, Djibouti, DR Congo, Egypt, Kenya, Malawi, Mauritius, Sudan, Uganda, Zambia and Zimbabwe attended the meeting. The Chief Executive Officers of the COMESA Monetary Institute, the COMESA Clearing House, the Association of African Central Banks and a Representative of the Trade and Development Bank also attended the annual meeting.